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Matthew Paulson: 40 Rules for Internet Business Success Book Summary

By Michael George Knight — 6 years ago

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  • 1: Before taking the entrepreneurial leap, ask “why?”
  • 2: Successful entrepreneurs will set specific and measurable goals, and will accomplish them no matter what else is going on in their lives
    • Action steps: set challenging but achievable weekly goals, build time into your work week to accomplish goals, commit to the time and effort it takes to accomplish goals regardless of outside factors
  • 3: Relationships trump knowledge
    • While technical knowledge is great, the people who really do well are those who can make and maintain their business connections, know the right people, and be able to leverage the skills and abilities of others
    • If you don’t have the right business relationships or connections, create them. One of the strategies to attend events that have the type of people you want to get to know
    • When forming a relationship, understand you have to contribute as well, not just take
    • Always act friendly and professionally, check in regularly, sometimes connect for social reasons
  • 4: Become a voracious consumer of content
    • People who build and run successful businesses are lifelong learners
    • Understanding what type of learner you are and all the different forms of learning from podcasts, audiobooks, online courses, auditing university course, etc
    • Carve out time in your day for both learning and doing
  • 5: Don’t sacrifice family time, even though some entrepreneurs feel it necessary
    • Do not build your business at the expense of your relationship with your family members
  • 6: Head in one direction at a time
    • Focus and work on the one business idea you’re passionate about and believe has the greatest chance of success
    • Successful entrepreneurs start with one until it gets running. After the business is established and successful, they create systems of people, processes, and technology to run the day-to-day operations of the business so they do not have to give it their undivided attention
    • At a certain point, you can decide if you want to see how large you can scale your business, or hand it off to other team members so you can start another business
    • When deciding whether to commit to something, if you feel anything less than “hell yeah!” then the answer is no
    • One successful business will be a great addition to your growing business portfolio
  • 7: follow the supermarket rule
    • If you are ever going to do something in business that will sour your relationship in such a way that it causes you to turn and walk away when you see that person in the supermarket, do not do it
  • 8: Be the person everyone wants to work for
    • Don’t micromanage. If you trust someone enough to hire them for the job, don’t hover over them
    • Be conscious of your team’s time, and be transparent with your team members
    • They should be clear on how their particular role contributes to the entire company and big picture
    • There is rarely a time where keeping secrets from team members grows the company
    • Compensate them well. When you pay above average salaries, you’ll attract better talent and give them a reason to stay with your company for the long-term
    • Consider offering end-of-the-year bonuses and profit-sharing plans so that your team can participate in the success of your company
    • Surprise your team members, and every once in a while do something nice that goes beyond compensation package
    • Be tough but fair, provide latitude for people to get their work done and don’t make excuses
    • Set clear expectations and consequences for employees
  • 9: Don’t quit your day job too early
    • When you put yourself into a corner, you’ll become desperate for cash and possibly make decisions and bad deals that will hurt you in the long term
    • If you try and scale your business too early, any flaws in your business model will be magnified
    • Also evaluate the opportunity cost of keeping your day job too long and missing opportunities to grow your business
    • Keeping your day job for the health benefits can be an obstacle, but it shouldn’t hinder the big picture and opportunity
    • Recommends quitting day job when your business has generated more net profit than your salary for three consecutive months, and your projected net income shows a reasonably good chance that trend will continue
    • During this stage, live off your salary and use business income to pay off debt and build an emergency fund or transition fund. This will also prevent you from developing a lifestyle that requires both incomes
    • Identify how much income your business needs to generate before you can quit your day job
  • 10: Prepare for failure, plan for success
    • In Millionaire Next Door, some people saved two years worth in an emergency fund to weather the storm in case their business tanks
    • Have a plan B, whether that be freelance or consultants work, or a secondary small business that provides some income
    • Think and plan about how your business might be structured if it were operating at a significant scale
  • 11: market selection is a make or break decision
    • You have to find your target market first and figure out where they congregate online
    • Plant your flag in a growing market, for all businesses in that market will benefit from the growth
    • Focus your efforts to better serve your target group
    • Sell to people who are willing and able to buy
    • It’s easier to plug-in to an existing market of buyers who are already purchasing your product or a similar one
    • Select the market you know and understand. Build a product or service for a market where you have background knowledge and possibly experience
  • 12: Don’t become a copycat of someone else’s business model
    • What worked then won’t work now
    • Your business must fit your personality
    • The key is to build a business that connects many of your strengths as possible, and requires as few of your weaknesses as possible
  • 13: Have a business model, not a business plan
    • In order to have a business, you need products or services to sell to your audience and a marketing strategy to get them to buy so you can generate revenue
    • Create a business model document, target market, product or service, marketing strategy, pricing, and a methods of delivery
  • 14: Let your customers develop your product
    • Listen and get feedback from people in your target market before building a product service
    • The key to building a great product is identifying a major problem, pain, or frustration that your target market has, and to identify or create a solution to solve that problem
    • Use LinkedIn groups to get feedback from your target market
    • Follow up with the people you interviewed at a later date, tell them about the product or service you’re building, and ask whether or not it will solve their current problems
    • If they say they will not buy your product, ask them why. This could be the most important feedback you get
  • 15: Be unique
    • Develop your USP (unique selling proposition). This answers the question, why would my customers buy from me instead of my competitors
    • Never compete on price
    • Provide more value or you need benefits that your competitors cannot offer
    • Consider your company’s USP when making all future business decisions
  • 16: Begin with a minimum viable business
    • You don’t need a perfect product to start. You should be focusing on doing just enough work to validate your idea by creating a proof of concept and making sure that it is something customers want and will pay for
    • Save time and money by receiving feedback from customers on your concept instead of building features they do not want or need
    • Solve problems only when they’re actually problems
  • 17: Don’t give up equity early on
    • use free and cheap alternatives instead of paying for a high-quality rate
    • Use profit sharing plans and bonuses for employees instead of giving up equity
  • 18: You don’t need the perfect domain name
  • 19: Use value-based pricing
    • You need to determine how much value your product or service is bringing to your customers and charge a percentage of that value
    • Determine your minimum pricing based on how much it is going to cost you to acquire a customer and deliver your product or service to them
    • Test pricing during your launch
    • Payment processing considerations, which forms of payment you’ll accept clearly list your refund policy on the order page
    • Make a big deal about your launch
    • When first starting to build a paid product, step up a can’t miss sign-up form on your website so that people can get updates on the product as it comes along. Get people in your target market on your mailing list
    • Send out email updates on the development of your product about once or twice a month
    • Send prelaunch emails to remind your future customers what the benefits or features of your product are
    • Bonuses and incentives for customers to sign up during the launch period
    • Don’t spend a lot of time on a bonus product. You can use an older product to give away for free, or get some free product form someone else in exchange for a contact of people who bought the product
    • Offer a discount during a defined period
    • Action step: create landing page to collect email addresses for your launch
  • 20: Grow your email list with blogs, videos, and conversations on social media with your personal customers
    • Develop a calendar of emails you’re going to send before and during your launch period
    • Set a clear date for your products, bonuses, and services
  • 21: Get your finances right from the beginning
    • Fully understand the legal structure under what your company is operating from the beginning
    • Become a corporation when you hit about $100k per year, and hire a local accountant to help with taxes
    • As a general rule, take one quarter of whatever you take home as profit and put it into a separate savings account for taxes
    • Action step: learn what taxes you should be paying and when you should be paying them
    • Open a separate checking account for your business and a separate savings account for your quarterly estimates
    • Use online bookkeeping software like Quickbooks Online
  • 22: Busyness is not productivity
    • Busyness is spending time working on your company without regard to what you are actually accomplishing. Productivity is competing specific tasks that bring you closer to accomplishing your business goals
    • Delegate day-to-day operations to teammates while you assign tasks, and use software tools and automation to handle regular and repetitive tasks
    • Spend most of your time on revenue-generating tasks for your business
    • Eliminate distractions when working
    • Pomodoro technique: 25 minute burst of focused work, five minute break. After four sessions take a longer break
    • Action step: identify the key tasks that’s cause your company to generate income
  • 23: Don’t be an employee in your business
    • When you become and owner of a business, you can’t spend too much time on the technical work since you have more important things to handle. Delegate tasks to team members you trust and rely on to get those technical tasks done
    • There are real benefits to leveraging the talents and abilities of others no matter what size
    • Know what your time is worth and the power of delegation
    • Recommend hiring employees for the day to day tasks that need to be done on a recurring basis
    • When you are preparing to hire an employee or bring on a contractor, create a series of standard operating procedures (SOP) for the various tasks they will be performing
      • Description of the task, why it is important, and what role it plays in your business
    • Software automation that takes care of menial tasks on social media like zappier.com and ifthisthenthat.com to update social media, add email lists, and sync files across dropbox and drive
    • Action steps: identify the tasks in your business that you should be paying someone else to do, create SOPs for tasks to need to delegate or outsource
  • 24: Befriend your customers
    • The individual relationships you have with your customers are the best way to get feedback on what your company is doing right, what it is doing wrong, and what it should be doing next
    • You should be actively working to maintain the relationships that you have with your customers
    • Do customer service well personally for the first six months at least so you know exactly what issues your customers are facing when your product or service is first getting off the ground
    • Get feedback early and often
    • Ask what they like, what they don’t, what they could change if they could, and which products or services they wish your company offered
    • Ask for feedback before product development work
    • Automatically send an email for feedback one week after they purchased your product
    • Action step: take an active interest in your customers and work to maintain the relationships, and respond to customer service requests quickly and personally
  • 25: Not everyone needs to be your customer
    • You should do everything you reasonably can to make sure your customers are happy with your service
    • An initial red flag for a difficult client is them asking for less than market rate for your first product or service. This means they will not want to pay market rate for future projects
    • The best way to deal with problem customers is to not cater to all their demands, though you should provide a reasonable effort to answer questions
    • Polite ways to approach not working together
    • Action steps: don’t bend over backwards for customers who haven’t paid yet, and give yourself permission to walk away from a client
  • 26: Read before you sign
    • Be mindful of employment documents
    • Don’t do handshake deals
    • Have agreements with other companies in writing so there is no confusion
    • Action steps: read every contract presented to you before signing on the dotted line
      • Review any legal agreements you have signed with your current or former employers
    • 27: Measure your company’s vital signs
      • Measure your KPI’s, or Key Performance Indicators to monitor your company’s vital signs regularly
      • Checking vanity metrics are the wrong things to check
      • Actionable metrics you should be checking: customer acquisition costs, conversion rates, referral sources, user growth, active users, lifetime value per customer, churn rate, revenue, and profit
      • Create a list of the most important metrics you should be checking on a regular basis
    • 28: Be skeptical, be aware
      • Be aware of the invoices you receive and keep track of your domain names, trademarks, and purchases
      • Trust but verify. Be wary of internal fraud
      • Consumer accounts and credit cards tend to have better protection than business accounts
      • Use a password management software like Lastpass
      • Have good liability insurance policies for yourself and your business
      • Action steps: hire a lawyer when necessary, open separate consumer credit card to pay expenses, keep online credentials secure, use a password manager and install antivirus malware software, work with an independent insurance agent to set up business and personal liability policies
    • 29: strengthen your business’s weakest links
      • Identify single points of failure with the systems in play provided by other companies so that you can have a Plan B
      • Pick a reliable web hosting service from the start, regularly create backups of every website, and have a secondary posting waiting in the wings in case there’s a problem with your primary
      • http://www.managewp.comand spreads websites across a couple servers and uses weekly backups just in case
      • Identify points of failure and Plan B backup systems, secondary web posts, content management systems, and payment processing services
    • 30: Fail, quit, regroup
      • Shiny object syndrome: wanting to start something else just because it’s a shiny new thing
      • Know when to continue with your business and when to quit
    • 31: If you build it, they won’t come
      • After you build it, you have to actively convince customers to go to your store and buy products
      • In order to find a balance between product development and marketing, devote a single day entirely for marketing, also called Marketing Mondays
      • Contact other blogs and offer to guest post, contact podcasts and offer to be a guest
      • Prepare a few topics when you send your email
      • Talk to people on social media and discussion forums about the problems that your product can solve
      • Write blog posts about your upcoming product or service and promote them on Reddit, Twitter, Facebook, Pinterest, and other relevant social media platforms
      • Research different ways you can advertise your product or service
      • After your product is launched, your next step is to develop a process to regularly test different marketing strategies and customer acquisition methods to ensure that you have a diversified set of web traffic sources. Ideally, you’ll have somewhere between 5 and 10 sources of traffic that regularly send web traffic and new customers to your business
      • Diversify your sources, you should not have one source that is responsible for more than 25% of your new customers
      • It will be difficult as a majority of the marketing strategies will be inefficient, but once in a while you’ll find one that is profitable
      • A marketing strategy is effective if it costs less to acquire a new customer than a lifetime value of that customer
      • Try a dozen different strategies for the first couple months, then start to hone in on the few that work really well
      • Action step: identify 5 marketing strategies you can try to attract new customers
    • 32: results driven advertising
      • Two broad categories of advertising
        • Brand building
          • Meant to solidify the brand in the consumer’s mind
          • Doesn’t have a call to action at the end, and hard to measure direct results
        • Direct marketing purposes
          • Calls for you to take immediate action after watching
          • Frequently tested and tweaked for effectiveness
        • Spend your precious advertising dollars on things that can be measured so you know if you’re getting a return on the investment of your ad spend
        • Always measure how much it costs to get a customer from where you are advertising
        • Use Google Analytics and possibly shopping cart management software to track origins of your sales
        • If you are creating a niche product or service for a particular industry, you can find websites with content for that market and buy banner ad placements on their website from the website owner
        • If you are trying to build an audience around a particular topic and hope to sell your customers information products like e-books and membership sites, you might want to focus on Facebook ads
        • When trying to establish yourself as an expert in a particular field and create a community surrounding your content, you should focus your time on establishing connections and building relationships with people in your community
        • Action steps: Identify the which marketing strategies would work best for your business, how you’re going to track sales from specific advertising channels to measure effectiveness of your ad buy, and test and tweak your almost breaking even ads to make that ad campaign profitable
      • 33: Go where the people are
        • Identify your target market and the places where they congregate online
        • Create an avatar that epitomizes your ideal customer
        • After talking to several people in your target audience, you will find the common threads between them such as where they congregate, what they subscribe to, etc.
        • Action steps: Talk to 3 to 5 people in your target market about your business. Identify as many ways as possible to reach your target audience
      • 34: Don’t rely on social media, SEO, or the tech press to market your business
        • Your marketing strategy cannot be dependent upon having your content go viral as that cannot be replicated
        • Do the hard work to regularly identify and test out new marketing channels
      • 35: Own your customer list
        • Don’t rely on someone else’s ecosystem to communicate with your customers
        • Avoid these ecosystems dependency issues by getting the email addresses of all your customers
        • Use your email list to tell your customers about the next project you’re working on or a related product or service that you’re marketing
        • If you use another company’s platform to communicate with your customers, create opt-in pages where your users can get some sort of bonus content in exchange for giving you their email address
        • Action steps: maintain an active list of your customers so that you can communicate them in the future
          • Determine what percentage of your audience comes from large company platforms and collect email addresses using bonuses and opt-ins
        • 36: Show credibility through social proof
          • One of the best ways to show credibility is to get reviews and testimonials
          • An easy way to get testimonials is to ask people who have already bought your product for a 3-4 sentence testimonial about their experience with your business
          • When listing the reviews and testimonials you receive on your website, include a customer’s full name, their company, links to their social media profiles, and a picture if possible
          • If your product is new and hasn’t launched yet, consider reaching out to influential people in your target market. These are people who have followings on blogs, podcasts, YouTube, etc, and offer them one of your products or access to your service and see if they would be willing to do a review of your product on their website or platform
          • People often search up product name plus review, so having those reviews on other websites show up in the search will legitimize and benefit your product
          • You can also demonstrate credibility by having an active presence on social media
          • By regularly posting, you show that you’re still open for business and are actively engaged with your customers
          • If you have a News section on your website, make sure to update it at least once per month
          • Action steps: collect reviews and testimonials from your customers and put on website, contact influential people in your market and ask to review product, showcase your team members and pertinent company information on website
        • 37: Always be testing
          • Run split tests to see what drives people to your site and what keeps them there
          • Test the following as a start: your value proposition, a variety of traffic sources, the initial ad copy that sends users to the registration page, the landing page, your auto responder series, marketing emails used to communicate with prospects, the sales page, headline copy font color layout, call to action button font size and text, order form with type and amount of information, pricing (one time vs. recurring), and discount final cost payment methods
          • com, 71 things to A B test, http://www.visualwebsiteoptimizer.com
          • Action steps: set up split testing software on your website, identify 10 different components of your customer acquisition process to test over several months
        • 38: Use three keys to revenue growth
          • 1) Acquire new customers
          • 2) Increase product sales or the frequency of those sales to existing customers
          • 3) Keep your churn rate low by convincing your customers to stick around and continue buying from you
          • You must regularly try out new marketing channels and don’t be afraid of asking existing customers for referrals
          • If something is working, figure out why it is working and know you can maximize the leads
          • Consider doing a direct mail or email campaign to an audience who may not be aware of your product or service
          • Create new products or add-on products or services beyond what you are already selling to them
          • Be on the lookout for new products or services you can sell along with getting feedback to generate those ideas on what would be most useful for them
          • Don’t take cancellations personally. Send them a personal email, thank them for being a customer, and ask them why they are cancelling your service
          • If you track product usage, try to reach out and reengage them so they don’t cancel
          • Action steps: look for add-on products or services that you can create and sell to your existing customers. Measure churn rate on a monthly basis. Email your former clients to ask them why they left
        • 39: Turn over stones
          • After a few years in business, there will be hiding and untapped revenue streams that your company could tap into if you knew they existed
          • Many businesses grow their company’s revenue by raising their prices or trying to acquire new customers, but seldom go hunting for potential new revenue streams
          • Package your product or services in a fresh new way an sell to a different audience. Do things a new way. Find a new product or service you can sell to your existing customers. Seek out a new ad network that will pay above average rates to market to your audience
          • When you are presented with a business opportunity out of the blue, take a bit of time to give it a cursory evaluation before saying “no” reflexively
          • Online businesses are rarely a zero sum game, so there are benefits to becoming friends with other entrepreneurs in your market space
          • Use co-registration on a thank you page for sign-up commission
          • Maximize your existing revenue streams
          • Action steps: be open to possibilities and partnerships from those who seek you out. Keep an eye on what your competitors are doing. Maintain healthy relationships with people in similar companies. Look for ways to maximize existing sources of web traffic and bring in new customers
        • 40: You are never finished
          • Your business is a living organism that must be nurtured and cared for until it is no longer yours
          • Businesses either grow or shrink, they never just continue at their current level
          • You need to keep growing your business until you sell it or shut it down
          • If you coast for too long, your business will naturally decline or a competitor will catch up
          • After you reach the point where you feel you have a successful business, take the time to regularly re-evaluate each component
          • Do a SWOT analysis: Strengths, Weaknesses, Opportunities, and Threats
          • Consider what aspects of your product, marketing, sales, operations, technical infrastructure, customer service, and accounting need shoring up
          • Once you have identified an area you need to focus on, sprint don’t jog from one task to another and get that part of your business where it needs to be
          • Shifting strategies: as your business grows larger, the strategies you need to keep growing will change
          • To move to a six-figure business you need to identify the core competencies and the tasks that cause your company to generate revenue
            • As you figure out how to capitalize on those revenue streams, you’ll need to hire part-time team members and purchase or create software to grow to the six-figure mark
          • To grow to the seven-figure mark, you’ll need to systematize all aspects of the business and have full-time team members run the day-to-day operations so you can focus solely on growing your business
          • Decide where you want your business to go and then make it happen

 

★DOWNLOAD THIS FREE PDF SUMMARY HERE

? MY FREE BOOK TO LIVING YOUR DREAM LIFE”

? SPONSOR BESTBOOKBITS BY USING PATREON 

? SUPPORT BESTBOOKBITS BY CLICKING THE LINKS BELOW

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